Lloyds Banking Group has announced that the economic impact of the Middle East conflict, specifically the war involving Iran, could cost the bank £151 million. The FTSE 100 lender, which owns Lloyds Bank, Halifax, and Bank of Scotland, also forecast a rise in UK unemployment and a slowdown in the housing market.
The bank's first-quarter results, released on April 29, 2026, showed a pre-tax profit of £1.8 billion, down from £2.1 billion a year earlier. The £151 million charge is related to potential loan losses from exposure to the conflict, according to the bank's statement.
Lloyds now expects UK unemployment to peak at 5.2% by the end of 2026, up from its previous forecast of 4.8%. The bank also predicted a 3% decline in house prices this year, citing higher borrowing costs and economic uncertainty.
Chief Executive Charlie Nunn said the bank is 'closely monitoring the situation' and has increased provisions for bad debts. The news comes amid broader concerns about the global economy, with oil prices rising due to tensions in the Middle East.
